Soy-based biofuels score two wins; one with EPA, another in Congress 

By Blair Shipp 

During the past month, the American Soybean Association has celebrated significant progress on two key federal policies that support soybean farmers and the U.S. biofuels sector. With action from both the Environmental Protection Agency (EPA) and Congress, advocacy from ASA and its farmer leaders is helping strengthen domestic demand for soy-based fuels, create market certainty, and reinforce the value of American-grown crops. 

On June 13, the EPA announced its proposed Renewable Volume Obligations for 2026 and 2027 under the Renewable Fuel Standard. 

The proposal includes a major increase in biomass-based diesel volumes, from 3.35 billion gallons in 2025 to 5.61 billion gallons in 2026. That 67 percent jump reflects rising domestic production capacity and feedstock availability, particularly for soybean oil, which remains the primary feedstock for biomass-based diesel in the United States. 

ASA welcomed the proposed volumes as a meaningful step forward for soybean farmers, processors and rural communities. The proposed increase exceeds the 5.25 billion gallons requested by a broad coalition that included ASA, the National Oilseed Processors Association, the Renewable Fuels Association, Clean Fuels Alliance America and others. 

The draft rule also recommends reducing Renewable Identification Number credit values for imported feedstocks and finished fuels, including used cooking oil and inedible tallow. ASA supports this move, which would help ensure that federal incentives benefit domestic producers rather than rewarding low-cost foreign imports that lack supply chain traceability. 

According to the agency, the proposed change would help re-level the playing field for U.S. farmers and biofuel producers who have lost market share in recent years due to foreign competition. 

Public comment open through Aug. 8 

The proposed rule is now open for public comment through Aug. 8. ASA is encouraging soybean farmers, processors, and other stakeholders to weigh in before the deadline.  

A virtual public hearing on the proposal was held July 8, and ASA leadership provided testimony in support of the proposed changes. 

ASA President Caleb Ragland of Kentucky, Vice President Scott Metzger of Ohio, Secretary Dave Walton of Iowa, and Chairman Josh Gackle of North Dakota each testified virtually during the EPA hearing. They emphasized how stronger RVOs would directly benefit soybean oil demand, encourage rural processing investment, and provide stability amid challenging market conditions. 

ASA leaders highlighted new and expanded crush capacity already underway in several states, including Kentucky, Ohio, and North Dakota. They noted that the soy value chain is ready to meet growing demand for renewable fuels and that increasing RVOs would strengthen farmer basis and stimulate rural economic activity. 

The officers also expressed strong support for EPA’s approach to limiting the influence of imported feedstocks on the U.S. biofuels market. Reducing credit generation for foreign materials like used cooking oil and tallow would help protect the integrity of the RIN system and prioritize domestic resources. 

Budget bill boost for biofuels 

Just days before the hearing, Congress passed budget reconciliation legislation that included major improvements to the 45Z Clean Fuel Production Credit. ASA and NOPA have long advocated for these changes, which will better align the credit with U.S. agricultural interests and low-carbon fuel goals. 

The legislation, passed July 3, limits eligibility for the 45Z credit to feedstocks grown and processed in North America. This provision excludes imported feedstocks such as Chinese used cooking oil and foreign tallow from receiving U.S. clean fuel incentives. ASA and NOPA have emphasized that this change will ensure taxpayer resources support domestic production and supply chains. 

The bill also removes the indirect land use change penalty from 45Z emissions modeling. ASA has consistently pushed for more accurate and science-based lifecycle emissions data, which allows U.S. crop-based biofuels to compete fairly in clean fuel programs. The modeling change is expected to benefit soybean- and canola-derived fuels in particular. 

In addition to these provisions, the legislation extends the 45Z credit through 2029 and maintains transferability. This offers the long-term certainty needed to support ongoing investments in advanced biofuels and domestic processing infrastructure. 

ASA President Caleb Ragland, a farmer from Kentucky, called the updates to 45Z a critical win for soybean growers. In a joint statement with NOPA, Ragland said the improvements will bolster the biofuel industry by supporting domestic energy production and prioritizing U.S. agriculture. 

He added that removing indirect land use change penalties and establishing a North American feedstock requirement ensures the credit supports American producers rather than foreign countries. 

ASA and its partners thanked congressional leaders for prioritizing clean fuel policy that supports agriculture and rural economies. The association will continue working with federal agencies to ensure effective implementation of the new credit provisions. 

Together, the EPA’s proposed RVO increases and Congress’s enhancements to the 45Z credit reflect growing federal recognition of the role soy-based fuels play in the future of clean energy. With commodity prices down and input costs still high, these actions offer timely support and a more stable outlook for soybean farmers. 

ASA urges growers and biofuel stakeholders to participate in the public comment process and continue engaging with policymakers s these proposals move forward. The Aug. 8 deadline for submitting comments on EPA’s proposed rule is approaching, and farmer input remains critical to shaping the final outcome.